 From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. Hello everyone and welcome to this breaking analysis. We're here to assess the VMware vSphere 7 announcement, which is the general availability of so-called Project Pacific. VMware has called this the biggest change to vSphere in the last 10 years. Now, Project Pacific supports Kubernetes natively in VMware environments. Why is this important? This is critical for multi and hybrid cloud because Kubernetes and its surrounding orchestration enable application portability and management. As we've been reporting, VMware is one of the big players eyeing multi-cloud, along with a crowded field of aspirants that include IBM with Red Hat, Microsoft, Cisco, Google, and a host of specialists in the ecosystem like Hashi and Rancher. As well, some players have focused in their respective stack swim lanes like security and data protection, storage, networking, et cetera. And with me to dig into this announcement is Stu Miniman. Stu is a senior analyst at Wikibon and co-host of theCUBE. Stu, good to see you, let's get into it. Great to talk about this, Dave. Okay, so vSphere 7, what is being announced and why is it relevant? Yeah, so Dave, as you said in the open, this is the general availability of what they talked about at VMworld 2019 as Project Pacific. So it really is integrating Kubernetes into vSphere. The way VMware, of course, will position this is that they're now enabling the 90% of the data centers around the world that have VMware. Hey, your Kubernetes enabled. Congratulations, you're cloud native, everything like that. Only being a little facetious here, but this is very important. How do we get from where we were to live in this more cloud native environment? So containers in general and Kubernetes specifically are being a first class citizen. There's a lot of work, Dave. And my understanding of this has been going on for a number of years. It's not like they just started working at this six months ago, a overhaul to how this works because it's not just, oh, we're going to stick a couple of containers on top of the guest operating system in the virtual machine, but there is a supervisor cluster for Kubernetes at the hypervisor level. And there's a lot of in the weeds things that we're all trying to understand and figure out because you've got a hypervisor and you've got VMs and now you've got the containers in Kubernetes and some of them are living in my data center. Some of VMware, of course, lives on multiple clouds like the VMware on AWS solution. So this will go there. And how do I manage that? How does this impact my operations? How does this change my application portfolio? Because the early value proposition from VMware always was, hey, you're going to put VMware in there. You don't need to touch your applications. Everything runs like it did before. You were running Windows apps on a physical server. You moved into virtual. It's all great. There's a lot of nuance and complexity. So when VMware says this is their biggest change in a decade, I'd say probably is. I think back to, you know, I remember when ESX 2.0 rolled out in vMotion, really changed the landscape that was big. The vVols moved to really allow storage to really understand that architecture and really fix storage was a huge undertaking that took many years. This definitely stacks up with some of those previous changes to really change the way that we think about VMware. The advertising you've even seen from VMware some places is don't think of them as VMware. They're Cloudware or Containerware or the like because VMs are still there, but VMware is much more than VMs today. So this feels like it's VMware trying to maintain its relevance in a cloud native world and really solidify its, I mean, let's face it, VMware is a platform. Pat Gelsinger says, ride the waves. You know, try to many times and many angles to try to ride the cloud wave and it's finally settled on the partnerships with AWS specifically, but others. And so really is this their attempt to become cloud native, not get left behind and be cloud naive, as many say? Yeah, great question, Dave. And absolutely there's the question as to, you know, what's happening with my applications? You know, lots of customers that say, well, I'm just going to satisfy the environments, watch the huge growth of companies like, you know, ServiceNow and Workday. Those applications, well, customers don't even know what they live on. Do they live on virtualization environment? Is it containers? I don't need to worry about because SaaS takes care of that. If I'm building modern applications, well, I'm probably not starting with VMs. Containers are the way that most people are doing that or, you know, heck, they might even be going serverless now if we take these environments. So how does VMware make sure that they have the broadest application support? Kubernetes really won the container orchestration wars. And this is a way that VMware now can enable customers to move down that path, to modernize their environments. And what they want to have is really some consistency between what's happening in the cloud and happening in the environments that they control themselves. So VMware is saying that containers are now a first class citizen within vSphere. What does that mean? Why is that important? First of all, are they really? And what does that mean? And why is that important? Yeah, so Dave, my understanding is, you know, absolutely it's there, you know, the nuance that you will put there is, you know, we're not just running, you know, bare metal servers with Linux and running containers on top of it. It is, you're still sitting on top of the hypervisors. One of the things I'm trying to understand when you dig down is, you know, at the device driver level, VMware always looked a little bit like Linux, but the people that use it and operate it, they're not Linux people, Dave. These, you know, the OS, the number one OS that always ran on VMware was Windows and the traditional applications that ran there. So when we talk about containers and we're enabling that in a Kubernetes environment, there are some questions about how do we make sure that my applications get certified? Dave, you've got a lot of history knowing things like SAP and Oracle need to make sure that we've tested everything and this works. This is not what we were running traditionally in VMware. And if VMware just thinks, hey, vSphere 7, turn the crank, everything certified, well, I would tell customers, make sure you understand that your application has been tested, that your ISV has certified this environment, because this is definitely, as VMware says, a huge architectural change. So therefore, there was some ripple effects to make sure that what I'm doing in this environment stays fully supported. Of course, I'm sure VMware is working with their huge ecosystem to make sure that all the pieces are environment. You mentioned things like data protection. We absolutely know that VMware is making sure that day one, the data protection plugs in and is supported in these environments when you're using the kind of Kubernetes persona or containers solutions in vSphere. Wow, this sort of brings me to my next question. I mean, we were talking to Bernard Golden the other day and he was saying, Kubernetes is necessary for multi-cloud, but it's insufficient. And so this seems to me to be a first step in, as I say, VMware maintaining and growing its relevance, but there's got to be a roadmap here that goes beyond just containers and portability. There's other management factors. You mentioned security, enabling the ecosystem to plug in. So maybe talk about that a little bit in terms of what's necessary to really build this out over the next decade. Yeah, and actually it's a great point. So first of all, vSphere, of course, is the core of VMware's business, but is only a piece of the overall portfolio. So this, it lives in, I believe they would consider this part of what they call their Tanzu family. Tanzu is their cloud native overarching piece of it. And one of the updates is their product, Tanzu Mission Control, which is an existing product really came out of the Heptio acquisition, is how we can really manage any Kubernetes anywhere. And this is pure software, Dave. I'm sure you saw the most recent earnings announcement from VMware what's going SaaS, what's going subscription. VMware's trying to build out some of their software portfolio that isn't kind of the more traditional shrink wrap software. So Tanzu can manage any Kubernetes environment. So of course day one, hey, vSphere seven, it's a Kubernetes distribution. Absolutely it's going to manage this environment. And but also if I've got Kubernetes from Azure, Kubernetes from Amazon, Kubernetes from other environments, Tanzu can manage across all of those environments. So what VMware has always done, if you think back in the early days of virtualization, I had a lot of different servers, how do I manage across those environments? Well, VMware was a layer that lived across them. VMware is trying to do the same thing in the cloud. Talk about multi-cloud and how do I manage that? How do we get value across them? Well, there's certain pieces that VMware is looking to enable with their management software to go across them, but there are a lot of other companies, Amazon, Google, actually not Amazon yet for multi-cloud, but Microsoft and Google absolutely spent a lot of time talking about that in the last year, as well as you mentioned companies like Rancher and Hashi Core Pop absolutely play across lots of these multi-cloud environments. Well, let's talk about the competition. Who do you see as the number one competitor? Well, so the number one competitor absolutely has to be Red Hat Dave. So when I've, we've been in the Kubernetes ecosystem for a number of years. For many years when I would talk to practitioners, the number one, you know, what Kubernetes are you using? Well, the answer for many years was, well, I'm grabbing it, you know, the open source and I'm building my own stack. And the reason customers did that was because there wasn't necessarily maturity and this was kind of the leading edge, you know, bleeding edge customers in this space. The number two besides build my own was Red Hat and it was because I'm a Red Hat customer, a lot of the Linux tooling, the way I'm building things, the way my application developers do things fit in that environment. And therefore that's why Red Hat has over 2,000 OpenShift customers, leading distribution for Kubernetes. And, you know, this seems, you know, purely, you know, directly targeted at that market that Red Hat did, you know, was a big reason why IBM spent $34 billion on the Red Hat acquisition is to go after this multi-cloud opportunity. So, you know, absolutely this shot across the bow because Red Hat is a partner of VMware's but absolutely is also a competitor. Well, Maritz told me years ago, he was, yeah, it's true, we're with everybody and you can see that sort of playing out. But what if, I mean, if you look at what VMware could do and some of their options, if they, what if they gave it away, that would really be a shot across the bow at OpenShift, wouldn't it? Yeah, absolutely, Dave. Because look, Kubernetes is not free. If you're enabling Kubernetes on my Google environment, I, you know, just within the last week, saw some things that were like, okay, wait, if you're testing an environment, yes, it is free, but, you know, started to talk about the hourly charges for the management layer of Kubernetes. So, you know, Kubernetes, you know, call our friend Corey Quinn, Kubernetes absolutely is not free and he will give you an earful and, you know, his thoughts on it. So, in Amazon or Google, and absolutely, Dave, it's an important revenue stream for Red Hat. So, if I'm VMware and, you know, maybe for some period of time, you make it a line item, it's part of my ELA, you know, a good thing for customers to look out for is when you're renegotiating your ELA to understand if you're going to use this, what is the impact? Because absolutely, you know, from a financial standpoint, you know, Pat Gelsinger and the VMware team has been doing a lot of acquisitions. Many of those, Dave, have been targeted at this space, you know, not just Heptio, but Bitnami and even the Pivotal acquisition all fit in this environment. So, they've spent billions of dollars. It shouldn't be a net zero revenue to the top line of what VMware's doing in this space. Yeah, so that would be an issue from Wall Street's perspective. But at the same time, it's, again, they're playing a long game here. Do we have any pricing data at this point? So, I still have not gotten clear data as to how they're doing pricing now. Okay, and then others that are in there and in the mix, we talked about Red Hat. I mean, certainly Microsoft is in there with ARC. I've mentioned many times Cisco coming at this from a networking perspective, but who else do you see in there, Anthos with Google? Yeah, and, you know, Dave, all the companies we're talking about here, you know, Pat Gelsinger has had to leverage his, you know, Intel experience to how to balance that line between partnering with everybody but slowly competing against everybody. So, you know, we've spent many hours talking about the VMware-Amazon relationship. Amazon does not admit the multi-cloud solution yet and does not have a management tool for supporting all of the Kubernetes environments, but absolutely, Microsoft and Google do Cisco, have strong partnerships with all the cloud environments and is doing that hybrid solution. And, yeah, Dave, just a thing to expand on a little bit there. If you talk about vSphere, you say, okay, vSphere 7's rolling out. Well, how long will it take most of the customer base to roll to this environment? There will be some that absolutely want to take advantage of Kubernetes and will go there, but we know that it's typically a multi-year process to get most of the install base over onto this. And if you extend that out to where VMware is putting their solution into cloud environments, there's that tension between, you know, is there a match actually between what I have in my data center and what is in the managed environment managed by VMware and Amazon or managed to support some of the other cloud environments. So the positioning always is that you're going to do VMware everywhere and therefore it's going to be consistent everywhere. Well, the devil's in the details because I have control of what's in my data center and I might have a little bit less control as to some of those managed services that I'm consuming. So absolutely something to keep a close eye on. And not just for VMware, everybody is having these concerns, even if you talk about the native Kubernetes distributions, most of the Kubernetes services from the cloud providers are not immediately on the latest revision of Kubernetes. Right, so okay, well, let's talk about that a little bit. Remember when OpenStack first came out, we said it was a Hail Mary against Amazon. Well, a new Hail Mary, and it looks like it has more teeth as Kubernetes, right? Because it allows portability and of course, Amazon doesn't publicly say this, but it's not, that's not good for Amazon if you're porting things, applications moving things around, moving them out of the Amazon cloud and that makes it easier. Of course, Amazon does support Kubernetes, right? But they've got alternatives. So, Dave, it's fascinating. So I've talked to many practitioners that have deployed Kubernetes and one of the top reasons that they say that why they're using Kubernetes is so they have options with the cloud. When you also ask them what cloud they're running, they're running Amazon, do they have plans to move off of it? Well, probably not. I had a great customer that I did an interview with at one of the KubeCon shows and they'd actually started out with Azure just because it was a little further ahead with Kubernetes and then for the services they wanted, they ended up moving to AWS. And Dave, it's not a click a button and you move from one Kubernetes to another. You need to match up and say, okay, here's the five or six services I'm using. What are the equivalents? What changes do I need to make? MultiCloud is not simple today. I mentioned HashiCorp as one of those companies that help people across these environments. If you have a Hashi solution and you're managing across multiple clouds, you look in the code and you understand that there's a lot of difference between those different clouds and they simplify that but don't eliminate it. There's just, there is not a way today to this is not a utility when you talk about the public cloud. So Kubernetes absolutely is existentially a little bit of a threat to Amazon but Amazon's still going strong in that space and the majority of customers that have deployed Kubernetes in the public cloud are doing it on Amazon just because of their position in the marketplace and what they're doing. So let's double click on that. So Jassy in an exclusive interview with John Furrier before last year's re-invent said, look, we understand there's a lot of reasons why people might choose multiple clouds. We can go through them M&A, developer preference, and I think people want to have optionality and reduce lock in potentially but I've always said by the way, just as an aside that the risk of lock in is far down on the list relative to business value. People will choose business value over no lock in every time. About 15% of the customers might not agree. Nonetheless, Jassy claimed that typically when you get into a multiple cloud environment he didn't use the term multi-cloud that it's not a 50-50. It's a premier primary cloud supplier. So it might be 70, 30, or 80, 20, or even 90-10 but it's really that kind of, you know, imbalance. First of all, do you see that? And then what does that mean for how they approach this space, multi-cloud in particular? So I'm sorry, you're asking how Amazon should approach this space? Yeah, I mean you've said that you think they'll eventually enter this marketplace. Yeah, absolutely Dave. First of all, in general, yes, I do agree. It is not, there are certain financial companies that have always chosen two of everything because for regulation and certain we need to protect ourselves. We're going to have two suppliers. We're going to keep them as even as possible but that is a corner case. Most customers, I have a primary cloud. That's what I'm doing. That's what IT tries to get everybody on and you need to have, is there a reason why you wanna use a secondary or tertiary cloud because there's a service that they need. Of course, you know, Google, you often run into, it's like, oh, well, there's certain data services that they're doing well and of course the business productivity solutions that Microsoft's doing or the relationship with Oracle that are driving people towards Microsoft. But just as we saw Amazon soften on their hybrid solutions, we spent a lot of time at Reinvent talking about all their various hybrid solutions. Since their customers are going to have multiple clouds and even you take most of their customers that have M&A involved, you buy another company, they might be using another cloud. As Microsoft's position in the marketplace has grown, you would expect that Amazon would have not just migration services, but management services to match what customers need, especially in this Kubernetes environment. Seems that it seems a natural fit for them. It's possible they might just leverage partnerships with Red Hat, VMware, you know, and some of the other players for the time being, but if the market gets big enough and the customers are asking for it, that's usually when Amazon responds. So let's wrap with sort of what this means to the customer. And I've said that last decade, really multi-cloud was a symptom of multi-vendor and not so much of the strategy that's changing, you know, clearly, you know, these jokes. CIOs are being called in to clean up the crime scene and, you know, put in edicts, corporate edicts around security and governance and compliance and so forth. So it's starting to become a complicated situation for a lot of companies. We've said that multi-cloud is going to be there. People are going to put the right workload and the right cloud, et cetera, and there's advantages to certain clouds. But what should customers be thinking, specifically as it relates to vSphere 7? Yeah, so Dave, the biggest thing I would say that people need to look at, it is that understanding in your organization that boundary and line between infrastructure and application. People have often looked at, you looked at the ascendancy of VMware and VMs and then what's happening with cloud and containers and we think of it from an infrastructure standpoint that I'm just changing the underlying pieces. This is where it lives and where I put things. But the really important thing is it's about my data and my application, Dave. So if I'm moving an application to a new environment, how do I take advantage of it? We don't just move it to a new environment and run it the same way we were doing it. I need to take advantage of those new environments. Kubernetes is involved in infrastructure, but the real piece is how I have my application, my developers, my app devs working on this environment and therefore it might be that if VMware is the right environment and I'm doing a lot of it, that the development team says, hey, I need you to give me a pool and provision this for me and I can have my sandbox where I can move really fast. But VMware helped initially customers when they went from physical to virtual move faster from an infrastructure standpoint. What it needs to do to really enable this environment is help me move faster on the application side. And that's a big gap from VMware's history. It is where the pivotal people and Heptio people and Bitnami and all the new people are helping along to help that whole cloud native team, but that is a big shift from customers. So for this to be successful, it's not just, oh, the virtualization admin, he upgraded to the new thing, he made some changes and said, okay, hey, I can give you a Kubernetes cluster when you need it. It's really understanding what's going to happen on the application side. And a lot of that is going to be very similar to what you're doing in cloud environments. And I think this is Dave often where you hear customers, they say, oh, well, I did that cloud and it was too expensive and it was too hard. And I repatriated everything else. It says, well, you probably didn't plan properly and you didn't understand what you were getting yourself into and you jumped into the deep end of the pool and oh, wait, I forgot how to learn how to swim. So that is where we, Dave, the technology part's always the easiest piece. It's getting all of the organizational and political things sorted out. And the developer, we know how important that is. We're seeing it's great to see VMware pushing faster in this environment, kudos to them for how fast they've moved. Project Pacific 2GA, that is really impressive to see and can't wait to hear the customers roll out because if this is successful, we should be hearing great transformation stories from customers as to how this is enabling their business, enabling them to move faster. And that has been one of the favorite stories that I've been telling with customers on theCUBE the last couple of years. The vast majority of VMware's business, of course, is on-prem and what essentially they're doing here is enabling developers in their customer base and they have half a million customers to really develop in a cloud native manner. The question is, from a cultural standpoint, is that actually going to happen or are the developers going to reject the organ and say, no, I want to develop in AWS or Microsoft, et cetera, in the cloud. And I think VMware would say, we're trying to embrace it no matter where they want to develop. But there's still going to be that interesting organizational tension or developer tension in terms of what their primary choice is, is there not? Yeah, Dave, absolutely. We've been saying for years that cloud is not a location, it is an operating model. So this is helping to enable that operating model more in the data center. There's still questions and concerns, of course, around consumption on demand versus whether you've bought the entire thing as more and more services become available in the public cloud. Are those actually enabled to be able to be used in my data center or hosted environments? So this story is not completed, but we are definitely ready. I believe we're saying it's the multi-clouds chapter three of what we've been watching. Well, and you're seeing a major TAM expansion yet again from VMware that started with ESX and then of course went into networking and storage and now they've got a cloud security division. We're talking about the cloud native capabilities here and on and on it goes. Stu, thanks for helping us break this vSphere 7 announcement down and good job. Thanks, Dave. All right, and thank you for watching everybody. This is Dave Vellante for Stu Miniman. We'll see you next time on theCUBE.